Last November Yle’s A-Studio programme reported that the Finnish tax administration had received information on around 20 Finns’ bank accounts in the Liechtenstein bank LGT. The data came from the German intelligence service, which had purchased the data from a bank employee.
The case showed large-scale tax avoidance by Finnish citizens. Tax officials said some 50-60 million euros of investments were involved, with the account holders including “representatives of wealthy families, key employees at international companies and Finns enriched by selling their companies”.
The Tax Administration confirmed on Wednesday that the preliminary investigation has not progressed. That ensures the individuals involved will avoid criminal prosecution and their identities will remain confidential.
Supreme Court ruling blocking action
The reason is the Latin concept of _ne bis in idem _("not twice in the same"), which corresponds to the principle of double jeopardy. As the tax office has investigated the cases, they cannot now be investigated by the police looking to file criminal charges.
In Finland, the practice has been for tax authorities to investigate and collect back taxes, while the police handle tax fraud charges. If the threshold for an investigation is reached, the case goes to trial.
In July, the Supreme Court made that procedure impossible by applying a ruling that is intended to make Finnish law consistent with judgements from the European Court of Human Rights. The new interpretation is that if a tax case has been investigated by the Tax Administration in pursuit of back taxes, it cannot then be passed to the police for criminal charges.
The loophole is expected to be fixed by a legislative change due to come into force at the beginning of next year, but that cannot be applied retrospectively to the Liechtenstein cases.